A Study about the power of accounting variables in predicting future cash flows, during the stages of company's life - cycles

Goran Heidari, Seyed Farhad; Hematfar, Mahmoud

doi:10.22034/iaar.2014.104351

A Study about the power of accounting variables in predicting future cash flows, during the stages of company's life - cycles

Document Type : Original Article

Authors

Seyed Farhad Goran Heidari

Mahmoud Hematfar

10.22034/iaar.2014.104351

Abstract

The aim of this study is to investigate the predictability power of future cash flows on some accounting variables during the frim’s life cycle (growth, maturity and decline). The sample of this research is table data which id selected from the firm’s listed in TSE during the period of 2003 – 2009. The findings show that, considering the life cycle postulates, operation cash flows growth increases in the growth stage gradually and reaches to its top in maturity and decreases in declining stage. Considering that regression considering that regression coefficient of every four models for maturity stage and also regression coefficient of every four models for maturity stage is more than regression coefficient of every four models for declining stage , it can be said that life cycle postulates have reliability in stages of growth , maturity and declining. The results of study are consistent with the life cycle postulates. More over, the results of each life cycle stage are almost according to the results of all sample firms

Keywords

Net profit

future cash flows

operational profit

stages of life _ cycle

investment in circulation